MMS
$86.26
Maximus
($.68)
(.78%)
Earnings Details
3rd Quarter June 2021
Thursday, August 5, 2021 6:30:00 AM
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Summary

Maximus Raises Guidance

Maximus (MMS) reported 3rd Quarter June 2021 earnings of $1.66 per share on revenue of $1.2 billion. The consensus earnings estimate was $1.12 per share on revenue of $1.1 billion. Revenue grew 38.0% on a year-over-year basis.

The company said it expects fiscal 2021 earnings of $4.65 to $4.75 per share on revenue of $4.20 billion to $4.25 billion. The company's previous guidance was earnings of $4.20 to $4.40 per share on revenue of $4.00 billion to $4.20 billion and the current consensus earnings estimate is $4.34 per share on revenue of $4.06 billion for the year ending September 30, 2021.

Maximus Inc provides business process services to government health and human services agencies in the United States and to foreign governments.

Results
Reported Earnings
$1.66
Earnings Whisper
-
Consensus Estimate
$1.12
Reported Revenue
$1.24 Bil
Revenue Estimate
$1.09 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Maximus Reports Fiscal Year 2021 Third Quarter Results

- COVID-19 Response Work Drives Record Quarter -

RESTON, Va.--(BUSINESS WIRE)--Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three and nine months ended June 30, 2021.

Highlights for the third quarter of fiscal year 2021 include:

  • Record revenue of $1.24 billion beat Company expectations driven by COVID-19 response work including vaccination distribution support services, unemployment insurance program support, disease investigation, contact tracing, and other key initiatives.
  • Operating income margin was 11.2% and diluted earnings per share were $1.51. Amortization of intangible assets was $12.1 million, or $0.15 diluted earnings per share. Adjusting for amortization of intangible assets, operating income margin and diluted earnings per share would be 12.2% and $1.66, respectively.
  • The Company is raising guidance for fiscal year 2021 to account for the strong third quarter results. Revenue is expected to range between $4.2 billion and $4.25 billion and diluted earnings per share to range between $4.65 and $4.75.
  • The acquired businesses of Attain Federal and VES completed on March 1, 2021 and May 28, 2021, respectively, are performing in-line with Company expectations.
  • A quarterly cash dividend of $0.28 per share payable on August 31, 2021, to shareholders of record on August 13, 2021.

"I am extremely proud of the team, their accomplishments, and their ability to deliver outstanding results to our government customers and raise the bar in demonstrating our capabilities," shared Bruce Caswell, President and Chief Executive Officer. "As an example, on a single day this quarter, nearly 13,000 employees began their first day of work with Maximus supporting a significant new COVID response contract for a key customer and underpinned by one of the largest cloud-based telephony environments ever created for government capable of handling a half-million calls per hour."

Caswell continued, "Several months into our relationship together, I’m even more impressed with the capabilities and dedication that our Attain Federal and VES teams bring to Maximus. Already, we see the anticipated acquisition benefits coming to fruition for the combined companies and for our customers."

Third Quarter Results

For the third quarter of fiscal 2021, revenue increased 38.0% to $1.24 billion as compared to $901.3 million reported for the prior-year period driven by COVID-19 response work including vaccination distribution support services, unemployment insurance program support, disease investigation, contact tracing, and other key initiatives. COVID-19 response work contributed approximately $460 million and $860 million for the three and nine months ended June 30, 2021, respectively. The profitability of this work has been steadily improving and now delivers operating income margins above the Company's corporate average.

For the third quarter of fiscal 2021, operating income totaled $139.6 million, yielding an operating margin of 11.2%. This compares to an operating margin of 9.7% for the prior-year period. Diluted earnings per share were $1.51 as compared to $1.04 for the prior-year period. Adjusting for amortization of intangible assets, operating income margin and diluted earnings per share for amortization of intangible assets would be 12.2% and $1.66, respectively, for the third quarter of fiscal 2021.

Results for the quarter include a full three months for Attain Federal and just over one month for VES, contributing revenues of $56 million and $46 million, respectively.

For the nine months ended June 30, 2021, operating income margin was 10.8% and diluted earnings per share were $3.84. Amortization of intangible assets was $23.7 million, or $0.28 diluted earnings per share. Adjusting for amortization of intangible assets, year-to-date operating income margin and diluted earnings per share would be 11.6% and $4.12, respectively.

U.S. Services Segment

U.S. Services Segment revenue for the third quarter of fiscal 2021 increased 29% to $436.3 million as compared to $337.0 million reported for the prior-year period. COVID-19 response work contributed an estimated $164 million of revenue to this segment.

Operating margin for the third quarter of fiscal 2021 was 14.3% compared to 18.1% reported for the prior-year period. The operating margin reflects continued headwinds experienced on some of this segment's core programs, including those impacted by the pause of Medicaid redeterminations. The segment also experienced a delay in non-COVID new work, which is now expected to commence next fiscal year.

The Company expects the U.S. Services Segment to deliver an operating income margin in the range of 16% to 17% for fiscal 2021.

U.S. Federal Services Segment

U.S. Federal Services Segment revenue for the third quarter of fiscal 2021 increased to $617.6 million as compared to $450.1 million reported for the prior-year period. As expected, the Census contract contributed $170.4 million less revenue in the period as compared to the prior-year period. This was offset by an increase of COVID response work that exceeded Company expectations and contributed $280 million of revenue to the segment. Segment results for the quarter included $56 million of revenue from Attain Federal and $46 million of revenue from VES for the period starting at the acquisition date, May 28, 2021.

The operating margin for the third quarter of fiscal 2021 was 13.9% as compared to 8.7% reported for the prior-year period. The margin benefited from the segment's higher than expected volumes on the COVID-19 response work.

The Company expects the U.S. Federal Services Segment to deliver an operating income margin in the range of 10% to 11% for fiscal 2021.

Outside the U.S. Segment

Outside the U.S. Segment revenue for the third quarter of fiscal 2021 increased to $189.6 million as compared to $114.2 million reported for the prior-year period. Operating income for the third quarter of fiscal 2021 was $8.3 million which yielded an operating margin of 4.4%. This compares to an operating loss of $5.8 million reported for the prior-year period as a result of this segment experiencing the most pronounced impacts from the pandemic. Results for the third quarter of fiscal 2021 were slightly better than expected, driven by favorable performance in the Australia employment services business.

This segment has several contracts in startup, most notably the two-region win on the U.K. Restart program. This contract is responsible for the largest share of the estimated startup losses which are more heavily weighted to the fourth quarter of fiscal 2021. The programs in startup are expected to exceed 10% operating income margins over their lives, with significant improvement to the financial contribution expected in the second half of fiscal 2022.

The Company expects the Outside the U.S. Segment to deliver an operating margin in the low single digits primarily as a result of the startup losses. The fourth quarter for this segment is expected to realize an operating loss due to ramping of the U.K. Restart program.

Sales and Pipeline

Year-to-date signed contract awards at June 30, 2021 totaled $3.24 billion and contracts pending (awarded but unsigned) totaled $1.38 billion. These awards reflect total contract value (TCV) and include the previously announced U.K. Restart award as well as the CDC Vaccination Hotline award assumed at $300 million TCV.

The sales pipeline at June 30, 2021, was $33.6 billion (comprised of approximately $4.2 billion in proposals pending, $6.8 billion in proposals in preparation, and $22.6 billion in opportunities tracking) and decreased as compared to March 31, 2021 due to awarding of UK Restart and an uptick in levels of delay and cancellation resulting from the COVID-19 pandemic. New work opportunities represent 63.6% of the total sales pipeline.

Balance Sheet and Cash Flows

Cash and cash equivalents at June 30, 2021, totaled $96.1 million. At June 30, 2021, there was $1.71 billion of gross debt.

For the three months ended June 30, 2021, cash flow used in operations totaled $33.0 million and free cash flow used in operations was $41.6 million. Cash flows in the quarter were significantly impacted by the additional investment in working capital created by the sequential increase to revenue. The Company expects fourth quarter fiscal 2021 cash flows to be strong.

Days sales outstanding (DSO) were 77 days at June 30, 2021, including VES on a pro-forma basis. The higher revenue for the month of June as compared to April and May contributed to an increased DSO.

On July 9, 2021, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on August 31, 2021, to shareholders of record on August 13, 2021.

Pro-forma for Acquisitions

A pro-forma included in this release assumes VES and Attain Federal had been acquired on July 1, 2020, and therefore included for a full twelve months of the Company's operating results. The operating income and operating margin for the twelve month period, excluding amortization of intangible assets, was $591.3 million and 12.7%, respectively, for the combined company inclusive of Attain Federal and VES. Both acquisitions improve the Company's gross profit margin and are accretive to fiscal 2021 results from operations.

FY21 Guidance Increase

As a result of the third quarter results, Maximus is increasing revenue, earnings, and cash flow guidance for fiscal 2021. The Company anticipates fiscal 2021 revenue will range between $4.2 billion and $4.25 billion and diluted earnings per share will range between $4.65 and $4.75.

For fiscal 2021, cash from operations is expected to range between $425 million and $455 million and free cash flow between $375 million and $405 million. The effective tax rate is expected to range between 25% and 25.5% and weighted average shares outstanding to be approximately 62.3 million.

Revenue attributable to COVID-19 response work is anticipated to be approximately $1 billion for fiscal 2021. The COVID-19 response work is tapering off as expected, resulting in a lower fourth quarter forecast as compared to the third quarter results. The fourth quarter of fiscal 2021 will be further impacted by the startup contracts in the Outside the U.S. Segment with planned losses totaling $13 million to $15 million for these contracts. Consistent with prior guidance, the Company assumes the Public Health Emergency (PHE) will remain in place beyond September 30, 2021.

Mr. Caswell added, "We are in a solid position to further our long-term organic growth goals and evolve our ongoing strategy across all three segments. This is partly driven by the benefits and new capabilities of the two recent acquisitions, and our team's unprecedented efforts throughout the past year which have deepened our relationships with key clients and brought new clients. With two months remaining in fiscal year 2021, its natural for us to be looking towards next year when we expect to see, not only macro-trends indicating improvement to our core programs but also momentum through new programs such as the UK Restart and more focused clinical and digital work afforded by Attain Federal and VES."

Conference Call and Webcast Information

Maximus will host a conference call this morning, August 5, 2021, at 9:00 a.m. (ET).

The call is open to the public and available by webcast or by phone at: 877.407.8289 (Domestic) / +1.201.689.8341 (International)

For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.

About Maximus

Since 1975, Maximus has operated under its founding mission of Helping Government Serve the People®, enabling citizens around the globe to successfully engage with their governments at all levels and across a variety of health and human services programs. Maximus delivers innovative business process management and technology solutions that contribute to improved outcomes for citizens and higher levels of productivity, accuracy, accountability, and efficiency of government-sponsored programs. With approximately 34,000 employees worldwide, Maximus is a proud partner to government agencies in the United States, Australia, Canada, Italy, Saudi Arabia, Singapore, South Korea, Sweden, and the United Kingdom. For more information, visit maximus.com.

Non-GAAP Measures

This release refers to non-GAAP measures and other indicators, including organic growth, free cash flow, days sales outstanding, results on a pro forma basis and other non-GAAP measures.

A description of these non-GAAP measures, the reasons why we use and present them, and details as to how they are calculated are included in our Annual Report on Form 10-K.

The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.

Statements that are not historical facts, including statements about the Company’s confidence and strategies, and the Company’s expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of the Company’s products are forward-looking statements that involve risks and uncertainties such as those related to the impact of the pandemic and our recently-completed acquisitions including but not limited to:

  • Our indebtedness following the completion of the VES acquisition is significant and could adversely affect our business and our ability to meet our obligations
  • Difficulties in integrating our operations with those of Attain and VES and realizing the expected benefits of these acquisitions.
  • If one or more of these contracts with the VA are terminated or are not renewed on favorable terms or at all, if the VA reduces the number of medical examinations allocated to VES under the contracts or if VES receives an adverse finding or review resulting from an audit or investigation, the benefits of the VES acquisition may be adversely affected.
  • In connection with the acquisitions, we may be required to take write-downs or write-offs, restructuring and impairment, or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition, and results of operations.
  • The ultimate duration of the pandemic
  • The threat of further negative pandemic-related impacts
  • Delays in our core programs returning to normal volumes and operations
  • The potential impacts resulting from budget challenges with our government clients
  • The possibility of delayed or missed payments by customers
  • The potential for further supply chain disruptions impacting IT or safety equipment
  • The impact of further legislation and government policies on the programs we operate

These risks could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2020, which was filed with the Securities and Exchange Commission (SEC) on November 19, 2020. A supplemental description of risk factors related to the Company's completed acquisitions of the Federal business of Attain and VES are included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 to be filed shortly. The Company's SEC reports are accessible on maximus.com.

Maximus, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Revenue

$

1,243,520

 

 

$

901,337

 

 

$

3,148,354

 

 

$

2,537,701

 

Cost of revenue

951,664

 

 

715,734

 

 

2,419,785

 

 

2,023,550

 

Gross profit

291,856

 

 

185,603

 

 

728,569

 

 

514,151

 

Selling, general, and administrative expenses

140,129

 

 

89,582

 

 

364,498

 

 

283,662

 

Amortization of intangible assets

12,132

 

 

8,712

 

 

23,718

 

 

26,734

 

Operating income

139,595

 

 

87,309

 

 

340,353

 

 

203,755

 

Interest expense

3,087

 

 

616

 

 

4,049

 

 

1,565

 

Other (expense)/income, net

(8,289

)

 

(671

)

 

(9,584

)

 

621

 

Income before income taxes

128,219

 

 

86,022

 

 

326,720

 

 

202,811

 

Provision for income taxes

33,724

 

 

21,558

 

 

87,534

 

 

51,963

 

Net income

$

94,495

 

 

64,464

 

 

$

239,186

 

 

$

150,848

 

Basic earnings per share

$

1.52

 

 

$

1.04

 

 

$

3.86

 

 

$

2.38

 

Diluted earnings per share

$

1.51

 

 

$

1.04

 

 

$

3.84

 

 

$

2.37

 

Dividends declared per share

$

0.28

 

 

$

0.28

 

 

$

0.84

 

 

$

0.84

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

62,064

 

 

61,882

 

 

62,028

 

 

63,463

 

Diluted

62,453

 

 

62,102

 

 

62,300

 

 

63,666

 

Maximus, Inc.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

 

 

June 30, 2021

 

September 30, 2020

 

(unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

96,110

 

 

$

71,737

 

Accounts receivable — billed and billable, net of allowance of $6,607 and $6,051

794,653

 

 

622,871

 

Accounts receivable — unbilled

334,666

 

 

163,332

 

Income taxes receivable

454

 

 

2,075

 

Prepaid expenses and other current assets

81,479

 

 

72,543

 

Total current assets

1,307,362

 

 

932,558

 

Property and equipment, net

67,794

 

 

66,721

 

Capitalized software, net

45,739

 

 

38,033

 

Operating lease right-of-use assets

186,944

 

 

177,159

 

Goodwill

1,757,795

 

 

593,129

 

Intangible assets, net

892,487

 

 

145,893

 

Deferred contract costs, net

37,020

 

 

20,891

 

Deferred compensation plan assets

47,041

 

 

36,819

 

Deferred income taxes

506

 

 

1,915

 

Other assets

27,905

 

 

11,584

 

Total assets

$

4,370,593

 

 

$

2,024,702

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

420,510

 

 

$

253,338

 

Accrued compensation and benefits

181,559

 

 

137,101

 

Deferred revenue

68,846

 

 

51,655

 

Income taxes payable

19,763

 

 

5,377

 

Current portion of long-term debt and other borrowings

60,586

 

 

10,878

 

Operating lease liabilities

82,572

 

 

80,748

 

Other current liabilities

26,768

 

 

22,071

 

Total current liabilities

860,604

 

 

561,168

 

Deferred revenue, less current portion

36,051

 

 

27,311

 

Deferred income taxes

204,174

 

 

24,737

 

Long-term debt, less current portion

1,633,135

 

 

18,017

 

Deferred compensation plan liabilities, less current portion

44,076

 

 

38,654

 

Operating lease liabilities, less current portion

118,341

 

 

104,011

 

Other liabilities

20,765

 

 

8,985

 

Total liabilities

2,917,146

 

 

782,883

 

Shareholders’ equity:

 

 

 

Common stock, no par value; 100,000 shares authorized; 61,472 and 61,504 shares issued and outstanding at June 30, 2021, and September 30, 2020, respectively

535,990

 

 

513,959

 

Accumulated other comprehensive loss

(36,031

)

 

(42,638

)

Retained earnings

953,488

 

 

770,498

 

Total shareholders' equity

1,453,447

 

 

1,241,819

 

Total liabilities and shareholders' equity

$

4,370,593

 

 

$

2,024,702

 

Maximus, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Cash flows from operations:

 

 

 

 

 

 

 

Net income

$

94,495

 

 

$

64,464

 

 

$

239,186

 

 

$

150,848

 

Adjustments to reconcile net income to cash flows from operations:

 

 

 

 

 

 

 

Depreciation and amortization of property and equipment and

capitalized software

10,829

 

 

16,278

 

 

33,664

 

 

47,496

 

Amortization of intangible assets

12,132

 

 

8,712

 

 

23,718

 

 

26,734

 

Deferred income taxes

(4,319

)

 

(8,248

)

 

3,632

 

 

(5,210

)

Stock compensation expense

7,344

 

 

5,758

 

 

20,823

 

 

17,558

 

Gain on sale of a business

 

 

(1,706

)

 

 

 

(1,706

)

Costs related to debt financing

8,509

 

 

 

 

8,509

 

 

 

Change in assets and liabilities, net of effects of business combinations

 

 

 

 

 

 

 

Accounts receivable — billed and billable

(167,592

)

 

(94,756

)

 

(83,881

)

 

(147,626

)

Accounts receivable — unbilled

(156,929

)

 

(82,556

)

 

(170,423

)

 

(80,267

)

Prepaid expenses and other current assets

(532

)

 

(3,733

)

 

7,542

 

 

529

 

Deferred contract costs

(6,589

)

 

(899

)

 

(15,773

)

 

(1,396

)

Accounts payable and accrued liabilities

104,478

 

 

26,300

 

 

116,873

 

 

48,622

 

Accrued compensation and benefits

51,148

 

 

29,808

 

 

34,387

 

 

33,647

 

Deferred revenue

10,328

 

 

(2,494

)

 

23,624

 

 

2,806

 

Income taxes

11,935

 

 

28,269

 

 

15,165

 

 

563

 

Operating lease right-of-use assets and liabilities

1,491

 

 

(1,237

)

 

1,077

 

 

(1,071

)

Other assets and liabilities

(9,767

)

 

2,851

 

 

(11,464

)

 

4,556

 

Cash flows (used in)/from operations

(33,039

)

 

(13,189

)

 

246,659

 

 

96,083

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment and capitalized software costs

(8,549

)

 

(9,314

)

 

(32,133

)

 

(28,436

)

Acquisitions of businesses, net of cash acquired

(1,365,533

)

 

(60

)

 

(1,779,473

)

 

(2,611

)

Proceeds from the sale of a business

 

 

3,250

 

 

 

 

3,250

 

Other

 

 

287

 

 

 

 

385

 

Cash used in investing activities

(1,374,082

)

 

(5,837

)

 

(1,811,606

)

 

(27,412

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Cash dividends paid to Maximus shareholders

(17,211

)

 

(17,175

)

 

(51,625

)

 

(52,988

)

Purchases of Maximus common stock

 

 

 

 

(3,363

)

 

(166,959

)

Tax withholding related to RSU vesting

 

 

 

 

(9,818

)

 

(10,614

)

Payments for debt financing

(22,759

)

 

 

 

(22,759

)

 

 

Borrowings under new credit facilities

1,700,000

 

 

 

 

1,700,000

 

 

 

Other debt borrowings

84,838

 

 

79,773

 

 

585,000

 

 

421,488

 

Other debt repayments

(344,042

)

 

(87,715

)

 

(607,880

)

 

(278,971

)

Other

(1

)

 

(305

)

 

(2,763

)

 

(957

)

Cash from/(used in) financing activities

1,400,825

 

 

(25,422

)

 

1,586,792

 

 

(89,001

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(433

)

 

1,694

 

 

2,830

 

 

(174

)

Net (decrease)/increase in cash, cash equivalents, and restricted cash

(6,729

)

 

(42,754

)

 

24,675

 

 

(20,504

)

Cash, cash equivalents, and restricted cash, beginning of period

119,965

 

 

138,742

 

 

88,561

 

 

116,492

 

Cash, cash equivalents, and restricted cash, end of period

$

113,236

 

 

$

95,988

 

 

$

113,236

 

 

$

95,988

 

Maximus, Inc.

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2021

 

% (1)

 

2020

 

% (1)

 

2021

 

% (1)

 

2020

 

% (1)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

436,338

 

 

 

 

$

336,950

 

 

 

 

$

1,269,487

 

 

 

 

$

957,929

 

 

 

U.S. Federal Services

 

617,601

 

 

 

 

450,143

 

 

 

 

1,352,982

 

 

 

 

1,210,105

 

 

 

Outside the U.S.

 

189,581

 

 

 

 

114,244

 

 

 

 

525,885

 

 

 

 

369,667

 

 

 

Total

 

$

1,243,520

 

 

 

 

$

901,337

 

 

 

 

$

3,148,354

 

 

 

 

$

2,537,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

104,814

 

 

24.0

%

 

$

93,029

 

 

27.6

%

 

$

323,256

 

 

25.5

%

 

$

268,073

 

 

28.0

%

U.S. Federal Services

 

155,776

 

 

25.2

%

 

84,723

 

 

18.8

%

 

312,405

 

 

23.1

%

 

232,502

 

 

19.2

%

Outside the U.S.

 

31,266

 

 

16.5

%

 

7,851

 

 

6.9

%

 

92,908

 

 

17.7

%

 

13,576

 

 

3.7

%

Total

 

$

291,856

 

 

23.5

%

 

$

185,603

 

 

20.6

%

 

$

728,569

 

 

23.1

%

 

$

514,151

 

 

20.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

42,606

 

 

9.8

%

 

$

31,996

 

 

9.5

%

 

$

116,655

 

 

9.2

%

 

$

102,633

 

 

10.7

%

U.S. Federal Services

 

69,647

 

 

11.3

%

 

45,490

 

 

10.1

%

 

172,877

 

 

12.8

%

 

131,455

 

 

10.9

%

Outside the U.S.

 

22,973

 

 

12.1

%

 

13,668

 

 

12.0

%

 

65,018

 

 

12.4

%

 

47,125

 

 

12.7

%

Gain on sale of business (3)

 

 

 

NM

 

(1,706

)

 

NM

 

 

 

NM

 

(1,706

)

 

NM

Other (2)

 

4,903

 

 

NM

 

134

 

 

NM

 

9,948

 

 

NM

 

4,155

 

 

NM

Total

 

$

140,129

 

 

11.3

%

 

$

89,582

 

 

9.9

%

 

$

364,498

 

 

11.6

%

 

$

283,662

 

 

11.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Services

 

$

62,208

 

 

14.3

%

 

$

61,033

 

 

18.1

%

 

$

206,601

 

 

16.3

%

 

$

165,440

 

 

17.3

%

U.S. Federal Services

 

86,129

 

 

13.9

%

 

39,233

 

 

8.7

%

 

139,528

 

 

10.3

%

 

101,047

 

 

8.4

%

Outside the U.S.

 

8,293

 

 

4.4

%

 

(5,817

)

 

(5.1

)%

 

27,890

 

 

5.3

%

 

(33,549

)

 

(9.1

)%

Amortization of intangible assets

 

(12,132

)

 

NM

 

(8,712

)

 

NM

 

(23,718

)

 

NM

 

(26,734

)

 

NM

Gain on sale of business (3)

 

 

 

NM

 

1706

 

 

NM

 

 

 

NM

 

1706

 

 

NM

Other (2)

 

(4,903

)

 

NM

 

(134

)

 

NM

 

(9,948

)

 

NM

 

(4,155

)

 

NM

Total

 

$

139,595

 

 

11.2

%

 

$

87,309

 

 

9.7

%

 

$

340,353

 

 

10.8

%

 

$

203,755

 

 

8.0

%

(1)

Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

 

 

(2)

Other selling, general, and administrative expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. Our results for the three and nine months ended June 30, 2021, included $5.6 million and $8.8 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc.

 

 

(3)

During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

Maximus, Inc.

FREE CASH FLOW

(Non-GAAP measure)

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Cash flows (used in)/from operations

 

$

(33,039

)

 

$

(13,189

)

 

$

246,659

 

 

$

96,083

 

Purchases of property and equipment and capitalized software costs

 

(8,549

)

 

(9,314

)

 

(32,133

)

 

(28,436

)

Free cash flow

 

$

(41,588

)

 

$

(22,503

)

 

$

214,526

 

 

$

67,647

 

 

 

 

 

 

 

 

 

 

Maximus, Inc.

Unaudited Pro Forma Results

(Amounts in thousands, except per share data)

 

 

 

Unaudited pro forma results

 

 

Three Months

Ended June 30,

 

Nine Months

Ended June 30,

 

Trailing Twelve Months

Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

2021

Revenue

 

$

1,335,780

 

 

$

996,462

 

 

$

3,566,466

 

 

$

2,934,920

 

 

$

4,645,540

 

Cost of revenue

 

1,004,523

 

 

787,189

 

 

2,679,170

 

 

2,283,589

 

 

3,503,074

 

Gross profit

 

331,257

 

 

209,273

 

 

887,296

 

 

651,331

 

 

1,142,466

 

Selling, general, and administrative expenses

 

151,321

 

 

110,754

 

 

425,062

 

 

360,370

 

 

551,143

 

Amortization of intangible assets

 

21,301

 

 

25,090

 

 

63,856

 

 

75,868

 

 

88,586

 

Operating income

 

158,635

 

 

73,429

 

 

398,378

 

 

215,093

 

 

502,737

 

Interest expense

 

8,701

 

 

9,423

 

 

26,715

 

 

28,528

 

 

36,426

 

Other (expense)/income, net

 

(7,320

)

 

(2,126

)

 

(10,401

)

 

(11,755

)

 

(11,437

)

Income before income taxes

 

142,614

 

 

61,880

 

 

361,262

 

 

174,810

 

 

454,874

 

Provision for income taxes

 

37,123

 

 

15,549

 

 

94,735

 

 

38,897

 

 

120,248

 

Net income

 

$

105,491

 

 

$

46,331

 

 

$

266,527

 

 

$

135,913

 

 

$

334,626

 

Basic earnings per share

 

$

1.70

 

 

$

0.75

 

 

$

4.30

 

 

$

2.14

 

 

$

5.40

 

Diluted earnings per share

 

$

1.69

 

 

$

0.75

 

 

$

4.28

 

 

$

2.13

 

 

$

5.37

 

Dividends declared per share

 

$

0.28

 

 

$

0.28

 

 

$

0.84

 

 

$

0.84

 

 

$

1.12

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

62,064

 

 

61,882

 

 

62,028

 

 

63,463

 

 

62,001

 

Diluted

 

62,453

 

 

62,102

 

 

62,300

 

 

63,666

 

 

62,285

 

Maximus, Inc.

Other Non-GAAP Information

(Amounts in thousands, except per share data)

 

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Operating income

 

$

139,595

 

 

$

87,309

 

 

$

340,353

 

 

$

203,755

 

Amortization of intangible assets

 

12,132

 

 

8,712

 

 

23,718

 

 

26,734

 

Operating income excluding amortization of intangible assets - non-GAAP

 

$

151,727

 

 

$

96,021

 

 

$

364,071

 

 

$

230,489

 

 

 

 

 

 

 

 

 

 

Net income

 

$

94,495

 

 

$

64,464

 

 

$

239,186

 

 

$

150,848

 

Amortization of intangible assets adjusted for income taxes

 

8,941

 

 

6,529

 

 

17,364

 

 

19,884

 

Net income excluding amortization of intangible assets - non-GAAP

 

$

103,436

 

 

$

70,993

 

 

$

256,550

 

 

$

170,732

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

1.51

 

 

$

1.04

 

 

$

3.84

 

 

$

2.37

 

Effect of amortization of intangible assets on diluted earnings per share

 

0.15

 

 

0.10

 

 

0.28

 

 

0.31

 

Diluted earnings per share excluding amortization of intangible assets - non-GAAP

 

$

1.66

 

 

$

1.14

 

 

$

4.12

 

 

$

2.68

 

 

James Francis 703.251.8526
JamesBFrancis@maximus.com

Madison West 703.251.8443
MadisonTWest@maximus.com

Source: Maximus